Gaming revenue falls less than estimates helped by tourists
Macau’s gaming revenue fell less than analysts’ estimates in June as tourists and leisure gamblers helped boost the region’s casinos including those owned by units of Las Vegas Sands Corp. and Wynn Resorts Ltd.
Gross gaming revenue fell 8.5 percent to 15.9 billion patacas (USD2 billion), the lowest level since September 2010 and marking 25 consecutive months of declines, according to data from Macau’s Gaming Inspection and Coordination Bureau. That followed a 9.6 percent decrease in May and compares with the median estimate of an 9.5 percent drop by seven analysts surveyed by Bloomberg.
“The mass market quietly continues to show modest growth – the market is heading into the right direction as we head into the openings of Wynn Palace and Parisian,” said Grant Govertsen, an analyst in Union Gaming Group LLC. Macau gaming revenue could start rebounding from September driven by the new projects, he said.
Macau’s casino operators have been shifting focus to tourists and recreational gamblers, with Wynn Macau Ltd.’s Wynn Palace project scheduled to debut August 22 and Sands China Ltd.’s Parisian expected to open September. That’s as the gambling slump in Macau extended beyond two years amid China’s economic slowdown and corruption crackdown.
The $4.1 billion Wynn Palace will have 1,700 hotel rooms and feature a lake with gondolas and fountains, while the Parisian, costing $2.7 billion, will showcase a half-size replica of the Eiffel Tower.
Macau has been trying to reduce its reliance on gambling, which contributes about 80 percent of the former Portuguese colony’s tax revenue. The city’s government is planning stricter rules on the industry, including raising the entry threshold for gaming promoters.
Macau also banned phone betting in early May, a form of proxy betting favored by some high-stakes gamblers from China. The gaming regulator said June 17 it plans to introduce penalties for violations in its $30 billion gaming industry, as it plugs gaps in outdated laws including one banning phone-betting at casinos. MDT/Bloomberg
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Actually Macao made a mistake years ago by kicking the budget travelers out, by closing more than 270 hostels and concentrating on the rich tourists only. A move, which most certainly was orchestrated with the influence of the big hotels.
But you always need more than one leg to stand on. With the budget travelers, and the small local businesses, which survived by them, Macao could have kept its nice colonial flair and atmosphere, as well as present itself as a cultural hub. But just look at it today. I will not be surprised, when the revenues from gambling will go down further within the near future.